Business case driven commercialisation Andy Mudd, APSE Solutions So - PowerPoint PPT Presentation

Business case driven commercialisation Andy Mudd, APSE Solutions

So what is a business case? • An argument or justification – why rather than how • To convince investors • To provide an assessment framework

A five case model • Treasury guidance • A balanced approach • Likely cases but could be different – Strategic – Legal – Financial – Commercial – Technical or operational

Key strategic issues • Synergy/conflict with corporate policy and objectives • Opportunity cost and priority • Resource availability • Market reputation and position

Key legal issues • Is it lawful? • Legal risks and liabilities • Fiduciary and other wider duties • Procurement • Delivery vehicle

Key Financial Issues • Cash flow and cash flow gap – When will you make a profit? – How will you pay your bills in the meantime? – Is it really viable? • Understanding cost – What costs should be included? – Importance of marginal cost • Setting prices – Cost plus or market generated

Budgets and trading accounts Budget week 1 Trading account week 1 Budget week 52 Trading account week 52

Commercial issues • The nature of the market – Size – Sector – Spread – Direction of travel • Current share • Projected future share • Risks and liabilities

So how do you do it? • Sell something that somebody wants to buy – Market size/market share • At a price that provides a return on expenditure – What cost? – What price? • On a sustainable basis – Returning customers – New customers/products

Product focus Are there Identify Who wants What will opportunities Product it? they pay? to up-sell? What have Will they buy Is that you got? it from you? enough to make a return?

Or customer focus Do you Can it be What do have profitable Identify they it/can you at that customer need? get it? price? What do What What they would add price is want? further available? value?

Either way it is always the customer that determines whether you have a business • Building a compelling offer – What does this mean? • Imitate existing successful products – Traditional approach – Head to head competition – Probably starts with the product • Attempt to create a new offer – Blue Ocean Strategy – Creating uncontested market space – Always starts with the customer

Resources and competitive advantage: Do you have a USP?

Growing the business – a commercial approach Ansoff’s Matrix Less risk More risk

Porter’s Generic Strategies

Kano analysis and customer focus: aiming for compelling

www.apse.org.uk